\u3000\u3 Shengda Resources Co.Ltd(000603) 558 Zhejiang Jasan Holding Group Co.Ltd(603558) )
Events
On April 25, the company released its annual report for 21 years and its quarterly report for 22 years. In 21 years, the company achieved a revenue of 2.052 billion yuan (+ 29.7%), and a net profit attributable to the parent company of 167 million yuan (+ 131.7%), which is at the lower limit of the previous performance pre profit. If the goodwill impairment of 09 million yuan and the dividend payment of equity incentive of 37 million yuan are added back, the net profit is 213 million yuan.
1q22 achieved a revenue of 532 million yuan (+ 28.5%), a net profit attributable to the parent company of 82 million yuan (+ 74.1%), and a deduction of non net profit of 66 million yuan (+ 40.7%), which was in line with previous expectations.
Business analysis
In the 21st year, the cotton socks grew steadily and the seamless business rebounded: the revenue of cotton socks / seamless business in the 21st year was 1.503502 billion yuan, an increase of 41.8% / 4.8%, accounting for 73.3% (+ 6.3pct) / 24.45% (- 5.8pct) of the total revenue respectively. Among them, cotton socks increased by 36.1% year-on-year; Seamless is in the stage of customer and capacity adjustment, which is reflected in the delay at the revenue end. In terms of component price, the sales volume of cotton socks business reached 383 million pairs (+ 34.42%), and ASP increased by about 6%. The price increase was mainly due to the rise of raw materials and the optimization of customer structure; The sales volume of seamless business was 21 million pieces (+ 34.08%), and ASP decreased by 14.8%.
Gross profit and net profit recovered significantly, increased cooperation with high-quality customers and improved profit space: in 21 years, the company’s gross profit margin was 26.76% (+ 6.66pct), mainly due to the year-on-year improvement of capacity utilization, customer optimization and smooth downward transmission of raw material price rise. The gross profit margin of cotton socks / seamless is 31.2% (+ 8.6pct) / 11.7% (- 2.6pct) respectively. The net interest rate was restored to 8.15% and the loss was reversed, of which the net interest rate of Q4 was only – 2.62%, mainly due to the asset impairment loss of 11 million yuan during the period.
2022 had a good start and was optimistic about the high growth of the annual performance: 1q22 company achieved a revenue of 532 million yuan (+ 28.5%) and a net profit attributable to the parent company of 82 million yuan (+ 74.1%); From January to February, the revenue / net profit increased by + 38% / + 137% respectively, which was higher than expected. In March, affected by the epidemic, the growth rate slowed down. Looking forward to the whole year, we believe that with the optimization of the company’s customers and the smooth promotion of production capacity, the revenue of cotton socks / seamless will achieve double-digit / 30% – 40% growth respectively. In terms of profitability, the gross profit margin / net profit margin of Q1 is 28.1% / 15.5% respectively, which has returned to the level before the epidemic, and is expected to remain stable and increase throughout the year.
Investment suggestions and risk tips
Investment suggestion: the optimization of the company’s customers and the steady increase of production capacity drive the increase of orders, and the seamless business card position is high, and the long-term growth power of the sports track is sufficient. Considering that the short-term epidemic may affect the progress of logistics and capacity climbing, the forecast for 22-23 years is lowered and a new 24-year forecast is added. It is estimated that the EPS in 22-24 years is 0.76 (- 5.6%) / 0.96 (- 5.3%) / 1.23 yuan, corresponding to pe16 / 13 / 10 times, maintaining the “buy” rating.
Risk tip: demand growth is less than expected, capacity climbing is blocked, order transfer of core customers, etc.
